As co-founder and CEO of TeamSnap, the household name in integrated sports management, Dave wears many hats – from being the boss to sweeping the floors, and everything in between. Since forming the company he has managed three successful investment rounds, secured strategic partnerships and overseen impressive growth. Nearly 20 million administrators, coaches, players and parents now rely on TeamSnap to manage their sports lives. He continues to focus on both day-to-day and long-term initiatives.
Nathan Latka sat down to get the inside scoop from Dave DuPont, CEO of TeamSnap. Key metrics include:
- 24m customers
- Health Check used by 10m screens
- 60-80$ CAC
Nathan Latka (00:00):
Hello, everyone. My guest this morning is Dave DuPont. He is the co-founder and CEO of TeamSnap, the household name in integrated sports management. Dave wears many hats from being the boss to sweeping the floors and everything in between. Since forming the company, he has managed three successful investment rounds, secured strategic partnerships, and overseen impressive growth. Nearly 20 million administrators, coaches, players, and parents now rely on TeamSnap to manage their sports lives. He continues to focus on both day-to-day and long-term initiatives. Dave, you ready to take us to the top?
Teamsnap CEO Dave DuPont (00:30):
I am, Nathan. Let’s do it.
Nathan Latka (00:32):
Well, we can’t bury the lede. If people heard that bio, they’re going, “Wait a second, what’s TeamSnap doing today if sports teams are not meeting?”
Teamsnap CEO Dave DuPont (00:40):
Well, surprisingly we’re doing better than expected. TeamSnap, you would expect us, given the fact that we are right in the middle, we provide communication and coordination services to sports organizations. We’re right in the middle of sports activity and when activity goes to zero, you kind of expect us to suffer, and we did to a limited extent. We saw a quick decrease in activity in mid-March and it flattened out and has climbed ever since. We think part of the reason is that our member organizations are still using TeamSnap to communicate with their members even if practices and games aren’t taking place and they are starting to come back. But that’s been the secret to us actually retaining a pretty healthy activity set and also revenue stream.
Nathan Latka (01:40):
Can you give us an example? I mean, can you name a sports team in Boulder or New York or anywhere that’s sort of using it and explain how they use you, just to really paint the picture?
Teamsnap CEO Dave DuPont (01:51):
Yeah, there’re literally tens of thousands of these organizations and what they’re doing is they’re using TeamSnap to for instance, coordinate online workouts, to just stay in touch with people, and the return to sports is in motion. We have a return to sports, we call it Interactive Heat Map on our website, which shows how quickly sports are returning in various parts of North America. In certain parts, it’s actually over a hundred percent, more Canada than the US because they manage the crisis more effectively, but we’ve been surprised by how quickly sports has come back, as well.
Nathan Latka (02:33):
Now, you launched this tool back in 2009. I assume you’ve done a lot of pricing tests since then. How are you priced today?
Teamsnap CEO Dave DuPont (02:43):
We’ve had lots of changes since we introduced TeamSnap in May of 2009. We started off as just a team communication and coordination solution, so our pricing was focused on that feature set, a freemium model, kind of classic freemium internet model. We’ve tested that for more than a decade now. But increasingly, we have expanded our business into larger organizations, so when we got started, you as a coach or manager would find out about TeamSnap somehow, often just through friends and sign up for it and invite everyone on your team. We had a free model, so if you hadn’t used TeamSnap before, we still have it by the way, you can use our premium version for 21 days, and then afterward you decide which version you want, and one of the versions is free. That still exists.
Nathan Latka (03:40):
You have a free trial and a freemium, there’s not a hard stop at 21 days?
Teamsnap CEO Dave DuPont (03:45):
There’s not a hard stop. We don’t force you off and say pay us or you’re done. It’s pay us if you want to continue to use the premium features, and that’s work well for us. Our conversion to paid from the free trial is about, and this has been consistent for a decade, 30%.
Nathan Latka (04:02):
Oh, wow. Okay, so if a thousand people on a given month start using that free trial, by the end of that 21 day period, about 300 will convert to paid or something like that?
Teamsnap CEO Dave DuPont (04:12):
Nathan Latka (04:13):
That’s amazing. Who are you selling? So let’s say the Bravos little League baseball team in Boulder is using you with 30 players, 49 parents, and three coaches. Is the coach paying? Is the parent paying? Is the player paying? Who’s paying?
Teamsnap CEO Dave DuPont (04:31):
Yeah, it’s typically the coach or many teams have a manager, an assistant coach. One of those two individuals sets up TeamSnap and typically pays. Sometimes they’re reimbursed by the participants or parents, sometimes not. Our pricing is between, we have annual and monthly plans, but just for simplicity, I’ll say our pricing is between 10 and 20 bucks a month for the entire team. The great majority of folks on TeamSnap, the players and the parents who you were referring to just a second ago, they don’t pay directly TeamSnap. Now, that’s the original model for us, and it’s still a significant portion of our revenue, but it’s not the main part of our revenue.
Teamsnap CEO Dave DuPont (05:15):
Increasingly, we’re selling TeamSnap to the club or league. They adopt it for all the teams, the Bravos, the Astros, et cetera in your example of a local sports league, and the coaches and managers and players and parents don’t pay at all. The organization pays for all of those organizations to be using TeamSnap, and we provide a whole range of services in addition to the ones we originally provided for teams for clubs, leagues, and associations.
Nathan Latka (05:45):
Teamsnap CEO Dave DuPont (05:46):
Things like registration for the upcoming season or scheduling games. Teams don’t schedule games, clubs and leagues do.
Nathan Latka (05:54):
I see, okay. The pricing then is between 10 and 20 per team and sometimes the organization will pay for 20 teams, which is the league in sort of their geographical area. Sometimes the team will pay directly, but very rarely are the parents paying or the players paying directly.
Teamsnap CEO Dave DuPont (06:12):
Nathan Latka (06:13):
Okay, and so how many teams today are using platform both free and then I assume we can just do 30% are paid?
Teamsnap CEO Dave DuPont (06:19):
Oh, well, daily active users, I’ll answer this in a couple ways, is about 5 million at this point. Wait a minute, monthly active users is 5 million. Daily active users is 1.5 million. You can do the math, but the average team has about 40 people on it, so that gives you a good feel for the number of teams that are active on teams now.
Nathan Latka (06:41):
Yep, interesting. Okay, one thing people always have to look at, especially if you’re building a SaaS company, is your ability to drive expansion revenue, especially to have it overcome any churn. You’ve sort of made this the decision and say, “No, we’re going to give our customers a great deal. We’re not going to upsell based off number of players or things like that.” Really your closest thing to that is upselling a league based off the number of teams in the league. Would you repeat that or would you give yourself the ability to upsell based off number of players if you redid this?
Teamsnap CEO Dave DuPont (07:14):
We actually do upsell based on the number of players, as it turns out, because we have several layers of our premium plan. One of them is for teams with more than 30 players, for instance. We have teams with a thousand players, so it’s only right to charge them a little bit more. But the expanded player roster feature, which is what we call it, you don’t pay more than the 20 bucks that I referred to, even no matter how many players you’ve got.
Nathan Latka (07:47):
I see, I see. Okay, got it.
Teamsnap CEO Dave DuPont (07:50):
To answer your question, would I do that again? I think we made the right call in the sense of yes, it was more difficult to build revenue using the model that we did, but at the same time we built customer trust and affinity and a large user base and we made a decent amount of money and now we are expanding on that large user base into the much more lucrative club league and association market. Much more money changes hands at that level than at the team level.
Nathan Latka (08:24):
When you say a decent amount of money, can you share maybe what runway you passed last year or range?
Teamsnap CEO Dave DuPont (08:31):
We don’t usually talk about revenue. I will tell you we are… What’s the closest I can… We’ve grown steadily, even since you and I talked and around, I think our average has been 45% per year gross, since we last talked in users and revenue. I’ll give you a little bit of a teaser. We expect our revenue this year to be the same as last year, so not 50% growth or 45%, but the same as last year. But given everything that’s going on in the sports world, I count that as a victory.
Nathan Latka (09:09):
How do you manage that? Because last time you came on back in 2017, you have raised capital, you’ve been creative with it, you haven’t just gone and raised heaps and heaps of VC. I think you’ve used some debt strategically, but I think you’d raised, what was it, like 43 million as of two years ago? How much have you raised today and how do you manage that story of sort of flat, even during Covid at the board meeting?
Teamsnap CEO Dave DuPont (09:32):
Oh, so we’ve raised 48 million to date and our investors are investors in other companies too, and they see what’s happening in the world around them and frankly, they’re delighted with our performance. Many people, many of our existing shareholders thought we were done. To your point at the beginning of this broadcast, how are you managing to survive when sports activity has really decreased? The reality is we weren’t as affected as we feared from a market standpoint, and also we took action to make sure that we were financially prudent moving forward. That part wasn’t fun, but we did cut expenses as soon as we realized that it was going to take a while for us to see the end of this crisis.
Nathan Latka (10:23):
You only, Dave, want to do that cut sort of once, which means you want to sit down with your executive team and say, “Listen, when we make this cut, how many months of runway do we want to have?” Every CEO is sort of taking a different approach. Some are planning for a really long time, 36 months sort of timeframes. Others are planning for sort of 18 months. When you sit down with your team before you decided what to cut and to announce it to the team, how many months of runway did you want to have post-cut?
Teamsnap CEO Dave DuPont (10:49):
We didn’t think about it that way, Nathan. We thought it more from the standpoint of what do we think is going to happen with the crisis and what kind of position do we want to be in? In March, the assumption we had was that our business would decrease on the order of, let me just think of the numbers here, on the order of 50% through the summer. We’d see a slight trickle in the summer, and then we thought that we’d see a gradual return during the fall to 70% participation, so only 30% down in the fall. I’m not sure whether that forecast will hold out, but we actually have exceeded it so far, significantly, very significantly.
Nathan Latka (11:35):
Exceeded in the extent that the business didn’t take as much as 50% hit, it was actually less of a hit than 50%?
Teamsnap CEO Dave DuPont (11:41):
Much less, yeah. Round figures, Nathan, was about a third initially, and then we climbed up from there. That relative to many companies, and especially companies like ours, was pretty good. I’d like to touch on the furloughs that we went on.
Nathan Latka (12:03):
Yeah, I mean, that’s not easy, Dave. How’d you do that?
Teamsnap CEO Dave DuPont (12:07):
It’s not easy at all, but as you can tell, I’ve been in business for a while, and as I told the team, I said, “Guys, I’ve seen this movie before. It’s not going to get better right away. We can hope it will, but we have to count on things taking a while to recover, so let’s cut once and once only,” to your point earlier. That means it’s going to be painful, and I really salute the team because in other companies, big companies like Hewlett-Packard, what I’ve seen is that functional leaders will often try to protect their people, so you end up with essentially turf war discussions. The team was not like that all. It was extremely collaborative. We decided, I remember that, I think it was March 13th that it became clear we had to do something. I grieved over the weekend and had the conversation I just described on Monday, and what was that? The 16th, and nine days later we furloughed a good portion of our company.
Nathan Latka (13:10):
Can you quantify that for us? How many people did you have to let go?
Teamsnap CEO Dave DuPont (13:13):
Yeah, so round figures, we furloughed about half the people in the company. That was about 80 folks and that was one of the worst days of my life, by the way, man.
Nathan Latka (13:25):
I can imagine.
Teamsnap CEO Dave DuPont (13:26):
These are people that were very dedicated to TeamSnap, that we were very close to. Yeah, that’s not fun, and we knew we were tossing people out into a challenging economic environment. We furloughed folks because we wanted to bring some back, and we have done that. We’ve brought back about 15% of the folks we furloughed and we hope to bring back more over time, but we’re going to be extremely conservative.
Nathan Latka (13:52):
What’s the team look like today? How many full-time folks?
Teamsnap CEO Dave DuPont (13:55):
Oh, we’re a little over 80 people at this point.
Nathan Latka (13:57):
80 folks, and how many engineers?
Teamsnap CEO Dave DuPont (14:00):
About a third of that is our engineering team. About half is product, so product managers, designers, and engineers.
Nathan Latka (14:10):
Do you have quota carrying sales reps with freemium sales motion, or no?
Teamsnap CEO Dave DuPont (14:15):
Yes, we do, not for the freemium part of our business, but clubs, leagues, and associations, that’s not freemium. That’s a classic business-to-business sales model. So yes, we do have a sales force there. We also, as our engagement with the overall market has grown, we have instituted advertising and commerce on our platform and we have sales people, different kinds of sales people that call on brands, direct advertising and commerce deals.
Nathan Latka (14:47):
How many of those folks? How many quota carrying folks?
Teamsnap CEO Dave DuPont (14:53):
I could give you the exact numbers, but I’m just thinking through the organization now, all together about 15.
Nathan Latka (15:01):
15, okay, pretty healthy group there. When you look at your sort of weighted cost to get a customer, especially in the new environment we’re in, I imagine it’s a very different CAC on your freemium versus going and selling a big league deal. But let’s just focus on getting one team paying 10 to 20 bucks a month. What’s your typical CAC on that kind of sale?
Teamsnap CEO Dave DuPont (15:23):
Yeah, so our typical CAC, we look specifically at CAC time to break even, and our typical CAC time to break even is six or seven months.
Nathan Latka (15:32):
So you’re paying like 60 to 80 bucks to get a customer.
Teamsnap CEO Dave DuPont (15:36):
Exactly, to get a paying customer.